RE:RE:RE:Holey Moley SurgeAnother cool situation with a close friend of mine who in the investment industry and evenually did very well. This was just before 1987 I think. When he was just a junior analyst he needed money to buy a big house in Toronto.
Back then there were comunications stocks and some of them had convertible preferreds with nice dividends. He shorted the common shares and it was easy for him to borrow stock to do so given the business he was in. He actually received the cash then for the house. He borrowed to buy the corresponding converible preferred ( not sure if it was Maclean Hunter back them) which were trading almost like the common based on the conversion price. The divy more than covered the loan interest. He used the cash from the sale I think to buy the house via a mortgage. If the market went up the preferreds quickly traded dollar for dollar like the common. Then the crash hit or maybe it was a few years later during the 1990's recession. The common went down a lot and the preferreds held up and he unwound the transaction for a nice profit. It actually worked for him and I went to his house many times. He must have done this in serious size. This actually happened.
splurge